Establishment of a public institution

Public institution registration online

The establishment of a public institution (VšĮ) is ideal for organizations that do not seek to generate profit. According to the Lithuanian Law on Public Institutions, a VšĮ is a limited liability legal entity designed to engage in activities that provide a societal benefit. These activities can include education, training, scientific research, cultural initiatives, healthcare, environmental protection, sports development, social assistance, legal assistance, or any other activities that serve the public interest.

At MyTax, we offer our services both in person and remotely, providing a convenient solution for those looking to establish a VšĮ from anywhere in the world. Establishing a VšĮ online is a cost-effective option, as it is typically cheaper than going through a notary. The process of opening a VšĮ online usually takes just 6-7 business days.

Advantages and disadvantages of public companies

Advantages of a Public Institution (VšĮ):

• Limited Civil Liability: Shareholders’ risk is limited to the assets they have contributed to the establishment of the VšĮ.
• Ability to Receive Support: A public institution can receive funding from two sources—legal entities and 1.2% donations from individuals.
• Ease of Transformation: A VšĮ can be quickly transformed into a Charitable and Support Fund or a budgetary institution.
• Unlimited Number of Founders: The establishment of a VšĮ can involve an unlimited number of founders.
• Full Material Liability Contract: The VšĮ can establish a contract ensuring full material liability with its manager.
• Non-commercial Activities: While typically associated with non-commercial activities, a VšĮ can still engage in commercial activities if they are directly linked to its non-profit purposes.
• Attracting Additional Funds: A VšĮ can accept new shareholders, allowing the transfer of shareholder rights and facilitating the exit of previous shareholders.

Disadvantages of Establishing a Public Institution (VšĮ):

• Employees of the VšĮ cannot use the institution’s profit for personal purposes.
• The VšĮ’s activities are strictly limited by its articles of association.
• Tax Obligations:
  A public institution is subject to several taxes, including profit tax (PM), personal income tax (GPM), compulsory health insurance (PSD), state social insurance (VSD), and others. At MyTax, we handle all the tax calculations, declarations, and accounting services if you decide to establish a VšĮ and need additional assistance beyond just company formation.

Summary of the Advantages of a VšĮ for Non-profit Purposes:

• Limited civil liability for shareholders.
• Ability to receive funding from multiple sources.
• Option to transform into a Charitable and Support Fund.
• Unlimited number of founders.
• Full material liability contract with the institution’s manager.